INTERMODALISM

What is an intermodal service offering?

When it comes to the transit of cargo intermodal simply means the use of more than one form of transport to move goods from the point of origin.

While ocean carriage remains MSC’s core service offering, we also offer inland transport services – be it road, rail or barge – providing our customers with a swift and reliable door-to-door service, wherever they are in the world.

Here is an example:

A container travelling from a factory in China to a retailer in the USA could go through the following intermodal moves:

Start off on a truck from the factory to a railhead/depot;

Be loaded on to a train to get to the port of loading;

Shipped on an MSC vessel to the port of discharge;

Loaded onto a barge to move it closer to the final destination;

Lifted onto a truck for the final leg of the journey to the consignee (recipient).

Sound complicated? Actually when you have MSC overseeing each stage of the journey it’s a remarkably easy, efficient and economical means of transporting your cargo.

Intermodal terminology

As with all aspects of global transport, intermodalism has a language and terminology all of its own. Some of the most common terms you are likely to come across are:

Carrier Haulage – this is where MSC (the ‘carrier’) is in charge of arranging the inland road transport, it is also widely referred to as Line Haulage.

Merchant Haulage – to correctly define this we first need to explain what we mean by the ‘Merchant’. In transportation terms, the Merchant can be any trader or persons (e.g. the shipper or consignee), their agents or anyone acting on their behalf, owning or entitled to possession of the goods. Thus Merchant Haulage is the inland transport of containers arranged by the merchant. It includes moving empty containers to and from hand-over points in respect of containers released by the Carrier to Merchants. Note: The Carrier's responsibility under the Bill of Lading does not include the inland transport stretch under Merchant Haulage.

Merchant Inspired Carrier Haulage – this is haulage conducted by a carrier, which is nominated by the shipper or receiver of the goods, but paid by the carrier.

Carrier Inspired Merchant Haulage – this occurs when the haulage service is performed by a sub-contractor of the Carrier.

Carriage – the process of transporting (conveying) cargo, from one point to another.

Drayage – originally this term referred to the hauling of a load by a cart with detachable sides (dray). These days, drayage refers to short-distance road transportation between the nearest railway terminal and the stuffing place/terminal. If, for example, your container is being transported by train from Chicago to the rail terminal in Baltimore – which happens to be a few miles from our pier at the Port of Baltimore – the container will not walk that distance on its own… Where drayage is required the associated costs are likely to be accounted for in the ocean freight rate customers are quoted.

Precarriage and Oncarriage

The difference between pre-carriage and on-carriage transportation is really very simple: all the transportation taking place BEFORE your cargo is loaded on a vessel is called Pre-carriage. It covers the carriage of goods (containers) by any mode of transport from the place of receipt to the port of loading into the ocean vessel – this would cover any necessary movement for packing/stuffing, etc.

All the inland transportation taking place AFTER the container is discharged from the vessel is called On-carriage.

Inland Logistics

While some, typically smaller, countries might only store containers at their ports, larger countries also tend to have inland container depots; conveniently-located storage areas for empty containers. Some depots are independently-operated, so that any carrier can use their facilities; others are operated by specific carriers. There are two main types of depots:

Container Freight Station (CFS) – this is a facility at which (export) LCL (less than a container load) cargo is received from merchants for loading (stuffing) into containers or at which (import) LCL cargo is unloaded (stripped) from containers and delivered to merchants.

Container Yard (CY) – this is a facility at which FCL (full container load) traffic and empty containers are received from or delivered to the Merchant by or on behalf of the Carrier. Note: Often this yard is used to receive goods on behalf of the merchant and pack these in containers for FCL traffic.

Dry Ports

Ports in some countries are choked by heavy traffic in and/or around the terminals. This can significantly slow the progress of cargo to or from the vessels. In some of these countries special areas have been developed specifically to lighten the burden on the seaports. These are the Dry Ports, which can be seen as a depot under Customs supervision. The status of the port is changed from an entry point into the country to a simple transit point and the “entry” part is moved to one or several further inland locations.

Dry ports make both imports and exports easier, promoting trade by offering:

For more information on dry ports utilised by MSC in your country, contact your local MSC office.

Different Intermodal tariffs - ramp, depot, door

When using inland transport in some large cities, MSC can sometimes offer more than one level of tariff – with the rate varying according to the level of customer/MSC involvement in its landside movement. For example, in Chicago we wouldn’t simply offer a ‘Chicago tariff’ – this is not precise enough. Instead we offer a choice between ‘Chicago Ramp’, ‘Chicago Depot’ or ‘Chicago Door’ rates. These are defined as:

Ramp – this is the most economical of the three services, involving the least input from MSC. We inform the customer where to pick up the empty container – at a railway ramp (or a depot near their premises). The laden container must be returned to the same ramp, at which point we will take charge of the rest of the move.

Door – as the name suggests, with this service MSC will bring the container right to your door, you only need to load the container. We will locate an empty container and bring it to your premises, wait for loading to be completed so that we immediately take charge of it, and bring the laden container to the railway ramp. The tariff for this service tends to be slightly higher.

Depot – this is the intermediate solution in which the client collects an empty container at a depot prescribed by MSC. If we have more than one depot within the city, the pick-up point will not necessarily be from the depot nearest the client’s premises (but we do our best). Once loaded, the container can be returned to any MSC depot in the city, which might be the same as the pick-up point, or the depot closest to the ramp.

In fact, there can be many points at which we can accept the cargo from the factory to the docks:

Directly at the factory or warehouse loading area.

From the factory rail ramp (if any).

From a local Container Freight Station (CFS).

From the local railroad rail ramp.

From the ports railroad rail ramp.

From a bonded warehouse.

From a Container Freight Station near the

Start of the actual move

After phone arrangements are made, we will send our trucker to the Place of Acceptance / Place of Receipt. This is the location where a consignment (shipment) is received by the carrier from the shipper; the place where the carrier's liability for transport venture commences. Alternatively, the driver might be directed to the Place of Despatch, a name and address specifying where goods are collected or taken over by the carrier (i.e. if other than consignor).

At that location, the trucker will receive a Delivery Instruction, the official document issued by a buyer giving instructions regarding the details of the delivery of goods ordered. It will be exchanged against a Way Bill, the trucker’s document which confirms the shipping order and which, for the shipper, acts like a receipt for goods. If you are shipping with MSC both of these documents should include our reference, i.e. our Booking Number.

Waiting time

In addition to the pure transportation charges, when moving goods by road it’s possible that you will have to account for Waiting Time charges. When we bring an empty container to a Place of Receipt location to load the cargo, the trucker allows for a certain period of ‘free time’, say, two hours. Should the loading take longer than that (starting at 2hrs + 1 second), the trucking company will often charge a Waiting Time fee for every hour spent waiting above and beyond the allowed free time.

If you’re aware that loading a particular container is likely to take a long time, you have the option to request a ‘Drop-and-Pick’ move. With Drop-and-Pick, the driver will bring over the empty container and leave immediately, returning only after being advised that the loading has been completed and the container is ready to be transported.

Clearly different cargoes take different lengths of time to load; if the cargo is household goods, for example, two hours is unlikely to be sufficient (six to eight hours would be more like it).

However, if the cargo comprised shrink-wrapped cartons on standard pallets, requiring no lashing, bracing or dunnage (stuffing/packaging materials), then the container could be loaded a lot quicker than two hours.

Depending on the Waiting Time tariff and the required period for the loading, you need to decide whether it is more beneficial to pay for extra time or to pay for a drop-and-pick. If you’re not sure, contact your local MSC office and we’ll be happy to advise you. The latter is obviously more costly than a single move due to the fact that it necessitates a double-trip by the trucker, but it might end up being cheaper than a regular move involving three or four hours of waiting time.

In some situations where the cargo might come from different plants, you can ask for multiple stops for which a tariff can be negotiated. The thing to watch here would be ensuring the integrity of the first stop cargo filling. Where there is less than a container load it’s crucial to ensure the cargo is sufficiently braced inside to avoid damage during transit to subsequent stops.

Customs Bond

The previously described intermodal variations of Door/Depot/Ramp, CFS/CY, Waiting Time and multiple drops are naturally all viable for imports as well as exports (unless local regulations prevent it, e.g. mandatory use of state-run transport). However, another complication may arise on the import side: local Customs.

Normally the import cargo stays at the port of entry until Customs duties have been paid and the goods are free to enter the country (port terminals are all secure areas under the control of the local Customs). Only then can MSC arrange the further intermodal move(s) to complete the delivery to the final destination.

Principally, two other situations may sometimes also arise:

The merchandise is to undergo manipulation or some transformation of some sort, or might need to be consolidated with some other cargo prior to re-export to a new destination, or even several various destinations.

Here’s a more detailed example to help clarify this particular scenario:

The import merchandise will be directly placed into a Bonded Warehouse normally situated inside the port area.

There, the merchandise can be altered, mixed with some other merchandise, repackaged and re-exported, all the while without having paid Import Customs Duties since it never technically entered the country. The merchandise is considered Bonded goods (dutiable goods upon which duties have not been paid i.e. goods in transit or warehoused pending customs clearance).

It is the warehouse, the building and the people responsible for its operations that will have filed for a Customs Bond.

Alternatively, Customs clearance is to take place at some inland destination (dry port), or even in another country further inland (e.g. discharge in Antwerp, Belgium, clearance in Geneva, Switzerland).

Again, to clarify, here’s a simple working example:

Depending on the particular country of the port of discharge, there may, or may not, exist the possibility to quickly pass through the port of discharge without the delay of Customs processing.
This happens if it can be proven that Customs Duties will be paid at an inland dry port in the same country, or that another country’s Customs will process the entry.

In the meantime, the goods are considered bonded goods, and will be placed under a Customs seal until the import duties are paid or until the goods are taken out of the country.
It is the trucking company that files for a Customs Bond and that is responsible vis-à-vis the Port of Discharge Customs.

For these situations, specialised warehouses and truckers have posted a bond with the Customs which allows them to handle such specific requirements. A bond is a type of bank guarantee. In the above two situations, Customs Duties will not be paid, nor even assessed, due to the specifics of the cargo move, and this is accepted by the Customs authorities.

However, should the merchandise be found somehow inside the country, or simply to have disappeared…then the Customs can have access to the funds in the bond to obtain payment for the duties which should have been processed, plus the penalties and expenses.

The costs

An intermodal arrangement may be billed to an MSC client in several ways:

A detailed billing, where all the components of the total transportation cost are detailed one-by-one.

A Through Charge or Through Rate or All-in Rate, including in one lump-sum the total rate from point of departure to point of destination.

In any possible variation of the above, for instance a first portion ‘Door New York to pier New York’ prepaid followed by a second portion ‘pier New York through to Ramp Antwerp’ in one lump-sum collect.

The choice is actually determined by you the customer – as negotiated as part of the terms of sale.

The local tariffs vary, of course, from country to country, but generally the domestic charges are per container and based on the distance travelled and the time required, (rather than on the type of cargo being transported, as is the ocean carriers’ practice).

Often the tariffs list transportation costs for a given zone, an area, belt or district extending about a certain point defined for transport and/or charge purpose. Therefore, some carriers offer Zone Haulage Rates, for which they will undertake the haulage of goods or containers between the place of receipt/delivery and the carrier's terminal.

Such haulage will be undertaken only subject to the terms and conditions of the tariff and of the carrier's Combined Transport Bill of Lading.

As always, if you’re finding it hard to differentiate between the various intermodal rates, do get in touch with your local MSC office who will be more than happy to make things clearer.

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